Profit Tracker: Beef, Pork Margins Softer

Profit margins for both beef and pork producers fell slightly again last week, yet both sectors remain solidly profitable.

Cattle feeders recorded average profits of $210 per head last week, about $13 per head lower than the previous week, according to the Sterling Beef Profit Tracker. The margins represent a $291 per head improvement over the average losses of $81 recorded last year at this time, according to estimates developed by John Nalivka, president of Sterling Marketing, Vale, Ore.

Beef cutout values declined $6.23 per cwt. last week, and beef packer margins declined $27.37 per head to end the week with losses of $63 per head. A month ago packers saw profits of $74 on every animal processed, and losses totaled $70 per head at the same time last year.

Farrow-to-finish hog margins declined $10.10 per head but profits remain more than $100 per head. This week’s margins remain near the highest pork profit margins in the Sterling Pork Profit Tracker database. Negotiated cash hog prices declined $4.54 per cwt. to $124.84 per cwt. Pork packers were estimated to lose $1.91 for every animal processed.

The spike in both cattle feeding and farrow-to-finish profits this spring is due to significantly higher cash prices and lower overall feed prices. Cash prices for fed cattle are more than $23 per cwt. higher than last year, and negotiated hog prices are nearly $50 per cwt. higher than last year.